Reinsurance sidecars news

Fidelis Insurance Holdings Limited, the specialty insurance and reinsurance firm launched by Richard Brindle, has taken its capital raising efforts in 2020 to more than $1.3 billion and that’s just its equity and debt raises.

AXIS Capital’s collateralised reinsurance sidecar vehicle Alturas Re Ltd. has completed another issuance of preferred shares, as the specialist global re/insurer continues to expand options for third-party investors to participate in its underwriting returns through quota shares.

A new set of guidance on the treatment of passive foreign investment companies (PFICs) published at the end of last week by the U.S. Internal Revenue Service and Department of the Treasury has been modified so that the active conduct test excludes insurance-linked securities (ILS) funds, as well as other ILS and reinsurance securitization structures.

Some of the earlier and larger retrocessional reinsurance programs in the market have received their firm orders or are completed, with indications that suggest rates are increasing even for some of the largest and most respected reinsurers in the market, suggesting much better returns are available for writing this business.

Global reinsurance firm Swiss Re continues to demonstrate its growing commitment to third-party sources of capital and insurance-linked securities (ILS), announcing this morning that it is launching a dedicated ILS fund, the Core Nat Cat Fund, so investors can participate in its natural catastrophe underwriting business.

Some insurance-linked securities (ILS) funds that invest in collateralised reinsurance contracts have been setting reserves for potential exposure to business interruption losses due to the COVID-19 pandemic in a handful of the major European catastrophe reinsurance programs, we understand.

Insurance-linked securities (ILS) market return potential is on the rise and in some cases the portfolios constructed, or added to, at the January 1st 2021 reinsurance renewals, are going to offer significantly higher return potential to investors.

Reinsurance capital could find itself on the hook for the largest share of COVID-19 losses from second waves of the virus sweeping Europe, with primary insurers largely happy with their loss-picks so far, analysts at Barclays have said.

During its annual investor day this morning, Swiss Re’s CFO John Dacey explained just how important the use of alternative capital and relationships with insurance-linked securities (ILS) investors has become for the company, explaining that it aims to build on its use of ILS capacity and find ways to make the capital more permanent.

Global reinsurance firm Swiss Re looks set to target profitable growth for its property and casualty (P&C) reinsurance business, aiming to underwrite more business in the hardening market at a reduced combined ratio.